USA: Cheniere Logs Net Loss, Liquefaction Projects on Track

Cheniere Energy reported a net loss of $154.8 million for the three months ended June 30, 2013, compared to a net loss of $73.0 million for the comparable 2012 period.

For the six months ended June 30, 2013, Cheniere reported a net loss of $271.9 million, compared to a net of $129.5 million during the corresponding period of 2012.

Liquefaction Projects Update

Sabine Pass Liquefaction Project

Cheniere Partners continues to make progress on the Sabine Pass Liquefaction Project, which is being developed for up to six natural gas liquefaction trains, each with a design production capacity of approximately 4.5 mtpa.  The company has received all Federal Energy Regulatory Commission (FERC) and Department of Energy (DOE) approvals for Trains 1 through 4, and it is also seeking regulatory authorization to develop Trains 5 and 6.  The Trains are in various stages of development.

• Trains 1 and 2 construction began in August 2012 and as of June 30, 2013, the overall project for Trains 1 and 2 was approximately 38% complete, which is ahead of the contracted schedule.  Based on our current construction, we anticipate that Train 1 will produce LNG as early as late 2015.
• Trains 3 and 4 financing was completed in May 2013, and a notice to proceed was issued to Bechtel to commence construction of Train 3 and Train 4 and the related facilities.  Cheniere expects Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
• The company continues to progress with the development of Train 5 and Train 6.  Cheniere has completed two SPAs for approximately 3.75 mtpa, in aggregate, of LNG volumes that commence with the start of Train 5 operations. Bechtel has begun preliminary engineering on Trains 5 and 6, and we have commenced the regulatory approval process.  In February 2013, the company commenced the National Environmental Policy Act (NEPA) pre-filing process with FERC, and it expects to file the complete application with FERC in the second half of 2013.  In February 2013 and in April 2013, Cheniere filed export applications with the DOE for exports to all current and future countries with which the U.S. has a Free Trade Agreement (FTA) as well as to any country with which the U.S. does not have an FTA in effect for the SPAs with Total Gas & Power North America and Centrica, respectively.  In July 2013, Cheniere received authorization from the DOE to export LNG volumes to FTA countries under the Total SPA and Centrica SPA.  The non-FTA authorizations for the SPAs for Total and Centrica are pending.

Corpus Christi Liquefaction Project

As currently contemplated, the Corpus Christi Liquefaction Project is being designed for up to three Trains with aggregate design production capacity of up to 15 mtpa.  Cheniere engaged Bechtel to complete front-end engineering and design work and the company expects to have project cost estimates in the second half of 2013.

In August 2012, Cheniere filed applications with the FERC for authorization to site, construct and operate the Corpus Christi Liquefaction Project and with the DOE requesting multi-contract authorization to export up to 767 Bcf per year (approximately 15 mtpa) of domestically produced LNG from the Corpus Christi Liquefaction Project to FTA and non-FTA countries.  In October 2012, the DOE granted Cheniere authority to export 15 mtpa of domestically produced LNG to FTA countries from the Corpus Christi Liquefaction Project.

Cheniere said it will contemplate making a final investment decision to commence construction of the Corpus Christi Liquefaction Project based upon, among other things, entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining financing.

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LNG World News Staff, August 2, 2013; Image: Cheniere